Infosys Beats 4Q Earnings Estimates - Analyst Blog

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Infosys Technologies Ltd ( INFY ) reported fourth quarter and fiscal 2014 results. Quarterly earnings per ADS from continuing operations came in at 85 cents, surpassing the Zacks Consensus Estimate of 79 cents by 7.6%. Quarterly earnings were up 9.0% year over year and 4.9% sequentially. Profits during the quarter were primarily driven by the company's differentiating strategy to capture potential opportunities and strategic organizational changes.

Quarter Details

During the quarter, total revenue generated was $2.1 billion, up 7.9% year over year but marginally down 0.4% sequentially. The company witnessed volume growth, client additions, large deal wins and increased sales momentum in its big data and cloud offerings.

The company added a total of 50 clients and also formed partnerships with clients to create innovative solutions across the mobile device during the quarter. Further, Infosys signed large outsourcing agreements across various sectors such as Energy, Communications, Financial Services, Government and Healthcare. In addition, the company was chosen as a strategic supplier to provide application development services for its global operations by Volvo Cars.

Revenue by Geographical Segment

During the reported quarter, Infosys reported strong year-over-year growth in geographic revenues. Revenues from North America grew 59.8% followed by Europe, where revenues increased 25.2%. Coming next in the line is Rest of World with revenue growth of 12.4%, followed by India with 2.6% growth.

Revenues by Industry Segment

Revenues in the Insurance, Banking and Financial services (IBFS) grew 33.5% while the Manufacturing segment (MFG) revenues grew 23.0%. Revenues from the Retail and Life Sciences division (RCL) grew 23.8% while revenues in Energy, Utilities, Communications & Services (ECS) grew 19.7% year over year.

Income

The company recorded an operating profit of $534 million compared to $457 million in the prior-year quarter, reflecting an increase of 16.8% year over year. However, the operating margin expanded 194 basis points year over year to 25.5% from 23.5% in the comparable prior-year quarter. Net profit after tax was $487 million for the quarter, up 9.7% year over year.

Cash

Infosys maintains a strong liquidity position, had cash & cash equivalents of $4.3 billion as of Mar 31, 2014 compared to $4.0 billion as of Mar 31, 2013.

Outlook

Concurrent with the earnings release, management provided outlook for fiscal 2015. Revenues are expected to increase in the range of 7% to 9%.

Infosys currently has a Zacks Rank #4 (Hold). However, investors interested in the IT sector can also consider stocks such as CDW Corp ( CDW ), Accenture plc ( ACN ) and Ansys Inc. ( ANSS ). CDW has a Zacks Rank #1 (Strong Buy) while Accenture and Ansys have a Zacks Rank #2 (Buy).



ACCENTURE PLC (ACN): Free Stock Analysis Report

ANSYS INC (ANSS): Free Stock Analysis Report

CDW CORP (CDW): Free Stock Analysis Report

INFOSYS LTD (INFY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: MFG , RCL , ACN , ANSS , CDW

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